EconomIc and FInancIal markEt ForEcast
below is a comparison of current economic and financial data with the panel’s
composite forecast for the next six months. (Through August 2015)
Current Level1 Strategists’ Predictions
STOCK MARKET 17,502 17,765
(Dow Jones Industrials)
BOND MARKET 2.0% 2.5%
(10-Year Treasury Note)
ECONOMIC GROWTH 5.0% 2.8%
(Annual Growth of Real GDP)
INFLATION 1.3% 1.6%
(Annual Increase in CPI)
SHORT-TERM RATES 0.02% 0.2%
(Three-Month Treasury Bills)
( 1) As of 1/5/15
For a balancEd portFolIo
The statistics below are a composite of results from our monthly poll of leading
portfolio strategists and are designed for a balanced growth investor.
STOCKS BONDS CASH
53.4% 37.0% 9.6%
12-MONTH TRENDS IN
LOW HIGH CURRENT
STOCKS 53.4% 59.0% 53.4%
BONDS 27.8% 37.0% 37.0%
CASH 8.8% 13.4% 9.6%
RANGE OF CURRENT
STOCKS 10% 65%
BONDS 20% 80%
CASH 5% 15%
CHANGE FROM PRIOR
STOCKS BONDS CASH
- 3.0% + 4.0% - 1.0%
Portfolio strategists polled 1/5/15 - 1/9/15
A. Gary Shilling & Co.
STOCKS 10% down 10%
BONDS 80% up 20%
CASH 10% down 10%
S&P Capital IQ
The Alpha Group
STOCKS 62% down3%
CASH 8% up 3%
Dudack Research Group
cash holdInGs bElow panEl avEraGE
behind the numbers with Axel Merk
Ten years from now, I don’t think we’ll be able to afford positive real interest rates. If we had gangbuster
growth, if we went back to historical average [rates] of financing deficits, we’d be spending $1 trillion a year
to finance our deficits.
The FOMC is going to chicken out and be late in raising rates. People think there’s going to be a gangbuster
exit in the U.S. It’s not going to happen. Workers with high-paying jobs in the shale industry are being laid off.
Can you raise rates in that sort of environment?
The dollar has been rising when people have felt good; but in a risk-off environment, when the market has
been plunging, the dollar has plunged. Foreigners are the new retail [class] pushing markets to new highs.
The flip side is that when there’s a correction in the market, don’t count on the dollar being a quote-unquote safe haven.
There is no safe asset anymore. When governments penalize you for holding cash, you cannot call cash safe anymore. When
interest is not making up for inflation, that is called financial repression. —Axel Merk to Gil Weinreich, ThinkAdvisor.com